KUALA LUMPUR: The Malaysian Institute of Accountants (MIA) yesterday officially launched the Ethics Standards Board, and Audit and Assurance Standards Board with the aim of enhancing ethics and best practices in the accounting profession.

The boards include members with non-accounting background, such as those from the business circle and legal profession. The Ethics Standards Board will include a representative from the Minority Shareholder Watchdog Group.

“We want to create a standard that would enhance the credibility of the accounting system, which is important to ensure investors’ confidence in our capital market. The inclusion of non-accountants is to ensure that the views of laymen and other interest groups are represented on the boards.

“The boards are also to complement the Audit Oversight Board that is expected to be formed by the end of the year,” said MIA president Nik Mohd Hasyudeen Yusoff after the official launching ceremony here.

The launch of two new standards boards, which come under MIA, was held in conjunction with the inaugural SC-Bursa Malaysia Corporate Governance Week 2009.

The two boards report directly to the MIA council and function as active participants in standards-setting process in regional and national concerns. The ethics board comprises nine members and is headed by Datuk Nordin Baharuddin while Ken Pushpanathan helms the 15-member audit and assurance board.
 
According to Nik Hasyudeen, MIA is confident that the effectiveness of the system would be further strengthened through the proposed amendment to the Accounting Act, which had been submitted to the government for consideration.

Hasyudeen said from 2007 to April 2009, MIA had conducted practice reviews on 203 audit firms and 46 financial statements of companies listed on Bursa Malaysia.

It has taken disciplinary actions in 19 cases involving complaints of breach of ethics, with eight being punished, seven dismissed, one dropped and three still pending.

“While we do receive complaints from time to time, there were only 19 cases being referred to our disciplinary board,” said Nik Hasyudeen, adding that the number represented just a fraction of the institute’s total membership of 26,000 members.

In his speech during the launch, Deputy Finance Minister Datuk Chor Chee Heung expressed hope that the setting up of the two boards would enable Malaysian accountants to have a formidable voice in engaging global standard-setters into taking the country’s needs and views in a serious manner.

“Standards can only serve their purpose when they are created in a holistic manner, and we must endeavour to ensure that we participate in such initiatives with our voices heard loud and clear,” he said.

This article appeared in The Edge Financial Daily, June 10, 2009.